LEGISLATIVE FISCAL ESTIMATE

SENATE COMMITTEE SUBSTITUTE FOR

SENATE, No. 3081

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: MAY 16, 2024

 

 

SUMMARY

 

Synopsis:

Establishes Stabilized School Budget Aid Grant Program to restore certain portions of State school aid reductions; permits certain school districts to exceed tax levy growth limitation in 2024-2025 school year; appropriates $44.7 million.

Type of Impact:

State expenditure increase from the Property Tax Relief Fund.  Local school district revenue increase.

Agencies Affected:

Department of Education.  Local school districts.

 

 

Office of Legislative Services Estimate

Fiscal Impact

 

2024-2025 School Year

 

 

State Expenditure Increase

 

Up to $48.2 million

 

 

Local Revenue from Increased Property Tax Levies

 

Up to $221.4 million

 

 

 

 

 

·         The Office of Legislative Services (OLS) concludes that this bill may cost the State up to $48.2 million to provide aid grants equal to 45 percent of proposed State school aid reductions in the 2024-2025 school year.  Information contained in the State aid notices for the 2024-2025 school year distributed by the Department of Education in February 2024 indicate total Statewide reductions of $107.2 million.

·         The OLS also estimates that, pursuant to the bill, a total of 159 school districts may request increases to their tax levies.  The OLS estimates that if all 159 districts received approval for the maximum levy increase permitted by the bill, local school districts may realize a revenue increase of up to $221.4 million in the 2024-2025 school year.  The OLS notes that the bill does not require school districts to implement the tax levy increases authorized by the bill; therefore, the estimated amount of school district tax levy increases is a maximum.

 

 

 

BILL DESCRIPTION

 

      This bill establishes in the Department of Education a Stabilized School Budget Aid Grant Program.  The purpose of the program is to provide aid grants to eligible school districts equal to 45 percent of the amount of the school districts’ State school aid reductions, as calculated under current law for the 2024-2025 school year.  The bill appropriates $44.7 million to fund the program.

      The bill also permits school districts, which experienced reductions in State school aid in the 2024-2025 school year compared to the 2020-2021 school year, to request certain increases in their adjusted property tax levies above the amounts permitted under current law.  The maximum amount of the adjusted tax levy increase pursuant to the bill is the difference between the amount of State school aid allocated to a school district in the 2020-2021 school year and the amount of State school aid allocated to the district in the 2024-2025 school year.  However, the bill prohibits a school district from increasing its adjusted tax levy by more than 9.9 percent of the prior year’s tax levy.  The authorization to increase the adjusted tax levy pursuant to the provisions of the bill would not apply to SDA districts. 

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS concludes that this bill may cost the State up to $48.2 million to provide aid grants equal to 45 percent of proposed State school aid reductions in the 2024-2025 school year.  Information contained in the State aid notices for the 2024-2025 school year, which were distributed by the Department of Education in February 2024, indicate total Statewide reductions of $107.2 million.  The OLS estimates that 152 school districts will be eligible for aid grants pursuant to the bill.

      The OLS also estimates that, pursuant to the bill, a total of 159 school districts may request increases to their tax levies.  The OLS estimates that if all 159 districts received approval for the maximum levy increase permitted by the bill, local school districts may realize a revenue increase of up to $221.4 million in the 2024-2025 school year.  The OLS notes that the bill does not require school districts to implement the tax levy increases authorized by the bill; therefore, the estimated amount of school district tax levy increases is a maximum.

 

 

Section:

Education

Analyst:

Abigail Chambers

Associate Fiscal Analyst

 

Christopher Myles

Senior Fiscal Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

 

 

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).